50 Percent Of Investors Are Bullish — "There’s Your Counter Indicator."

Last Thursday, CNBC’s Street Signs, Amanda Drury, said this about individual investor sentiment (Time Marker 6:15 – 6:20):

Source: Link

Did you see the face she made? Precious, no?

Today, I found this in my Inbox:

The so-called “Bernanke Put” is back in play.

The Standard & Poor’s 500 rose 3% last week, its best week since the first week of the year, as investors Wednesday took faith in Fed Chairman Ben Bernanke’s commitment to the bank’s easy money policies that have helped bolster the economy for years. The idea is that Mr. Bernanke and those policies will protect the market against downturns, much as put options, which grant the right to sells shares at a set price, and can protect stock portfolios in the event of a slide.

“The phones have been crazy,” William Lefkowitz, options strategist at asset management and brokerage firm National Securities, said Thursday. “People are excited after the Bernanke comments.”

“The retail investor is feeling better, with confidence in the market probably the highest I’ve seen it all year,” he said.

And that confidence is clear in the market’s so-called fear gauge, the Chicago Board Options Exchange’s Volatility Index.

The VIX finished at its lowest level Friday since May 22, the day stocks slid after Mr. Bernanke’s comments that the Fed could begin pulling back on its bond-buying program as early as the next few Fed meetings.

The VIX fell for a seventh-straight session Friday, dropping 1.2% to 13.84. That drop left the index down 32% from its year-to-date peak of 20.49 notched June 20. The seven-session run was the longest such streak since a nine-day run during October 2011, when the index fell from 45.45 as fears about the Greek debt crisis and concern about the impact of the U.S. credit downgrade abated.

The VIX–calculated from the prices investors are willing to pay for options tied to the S&P 500—is a measure of investor expectations for future stock swings. A VIX below 15 is typically indicative of extreme calm. But National Securities’s Mr. Lefkowitz said that calm is a bit concerning.

“There’s been no nervousness at all, which makes me a little nervous,” he said. [I agree!]

T.D. Amertrade’s J.J. Kinahan also worries there might be too much bullishness in the market.

“It’s hard to believe that fear is just gone,” said Mr. Kinahan, chief strategist at T.D. Ameritrade.

“It’s like the market is a spoiled child. Bernanke came in and said, ‘oh, I’m going to make everything alright,’ but sometimes the market needs a little tough love,” he said. Tapering of the easy money policies “is coming. It’s better to get expectations there,” he said.

Though the stock market seems to be eschewing worry, bond prices still point to continued concern, at least in that sector of the market. Yields on 10-year U.S. Treasurys were off the highs seen last week, settling at 2.60% Friday, but that is well above the year’s low of 1.61%, seen May 1.

Source: WSJ Morning MoneyBeat, 7/15/2013

I believe that all of us should be a little bit afraid right about now. (Unfortunately, I do not look as cute when I make the face.)

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